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China’s U.S. Treasury Holdings Fall to Lowest Level Since 2009
Third straight month of reductions fuels concern over shifting global debt dynamics and rising de-dollarization pressures
China has continued to reduce its holdings of U.S. Treasury securities, with May’s data showing a new low of $756.3 billion—the lowest level since March 2009, according to the latest release from the U.S. Treasury Department.
This marks the third consecutive monthly decline and is seen by some analysts as more than a technical adjustment—possibly signaling a strategic policy shift amid escalating trade tensions, debt concerns, and geopolitical realignment.
A Subtle but Steady Trend
In May, China offloaded nearly $1 billion in U.S. debt. While this figure may appear modest in isolation, it follows two months of much larger sell-offs:
- March 2025: China reduced its U.S. Treasury exposure by $19 billion
- April 2025: An additional $8.2 billion was sold
The cumulative effect of these reductions places China behind Japan and the United Kingdom in the ranking of top foreign holders of U.S. debt.
Though China still maintains a sizable $756.3 billion in U.S. Treasuries, the downward trajectory raises questions about long-term intentions. Chinese analysts have openly recommended diversifying away from U.S. debt in favor of more secure and less politically vulnerable stores of value—namely gold and strategic commodities.
Trade Tensions, Trust Erosion, and Debt Realignment
The Treasury data arrives as the U.S.–China relationship remains strained. The Trump administration’s protectionist trade policies, combined with sanctions and technology restrictions, may be driving China to reduce its exposure to American assets as a hedge against potential economic retaliation.
Notably, while some Western observers argue this reduction does not yet amount to full-scale “weaponization” of U.S. debt, others see it as part of a longer-term de-dollarization effort, aligning with moves from BRICS nations to build alternative trade and payment systems.
“Even if symbolic, these moves reflect a structural shift,” said one analyst. “Foreign confidence in U.S. fiscal governance is clearly under stress.”
This broader trend is evident in the declining role of foreign buyers in the U.S. Treasury market:
- In 2008, foreign investors held 57% of total U.S. Treasury issuance
- By 2025, that figure has dropped to 32%
This shift places greater pressure on domestic buyers and Federal Reserve interventions to absorb U.S. debt, as trust in the long-term sustainability of U.S. borrowing weakens.
Gold and Safe Havens Gain Appeal
In response to volatility in dollar-denominated debt, Chinese policymakers and economists are increasingly advising the accumulation of gold and hard commodities as a defensive hedge.
This aligns with broader macroeconomic strategies pursued by China and other BRICS+ nations to reduce dependence on Western financial systems, especially amid rising concerns over sanctions and dollar weaponization.
Global Implications: Trust in U.S. Debt Wavers
The slow but consistent offloading of Treasuries by China signals a deeper crack in the post-Bretton Woods financial order. While the moves are still modest compared to total U.S. debt issuance, the message is strategic: global debt holders are rethinking their allocations in light of evolving geopolitics, inflation risks, and a ballooning U.S. fiscal deficit.
Should this trend accelerate, it may challenge U.S. borrowing capacity, interest rate stability, and the global role of the dollar, particularly if joined by other major debt holders.
@ Newshounds News™
Source: Bitcoin.com
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India’s Wealthy Investors Pivot to Crypto as Bitcoin Outshines Traditional Assets
High-net-worth individuals (HNIs) and family offices in India are accelerating their shift from stocks and gold into digital assets, amid surging Bitcoin prices and renewed global crypto confidence.
India’s top cryptocurrency platforms are seeing a spike in institutional and HNI activity, as traditional asset classes underperform and crypto markets roar ahead. The renewed interest follows Bitcoin’s rally past $120,000, delivering 90%+ returns over the past year, making crypto investments increasingly competitive with equities, bonds, and gold.
A Surge in HNI Participation
A report from Moneycontrol notes a 30% weekly rise in HNI trading volume on Mudrex, crossing the $10 million threshold. CoinDCX also reported a 25–30% increase in average trade size by wealthy investors in July.
Between January and June, over 3,500 HNIs, family offices, and institutional entities accounted for nearly 50% of CoinDCX’s total trading volume. Their average monthly trading now exceeds ₹50 lakh ($60,000+ USD).
“HNIs are no longer asking why crypto,” said CoinSwitch co-founder Ashish Singhal. “The question now is how much to invest and where.”
Institutional Interest in Blue-Chips; Retail Fuels the Rally
While HNIs prefer large-cap cryptocurrencies like Bitcoin, Ethereum, Solana, and XRP, it’s the retail segment that’s driving daily trading momentum.
- CoinSwitch saw a 3x increase in daily trading volume
- CoinDCX posted a 40% jump in daily activity in July, topping $12.82 million
- Mudrex saw a 102% surge in spot trading and a 200% spike in futures trading in just one week
- ZebPay reported that 60% of user activity leaned toward buying
Interestingly, meme coins like Doge, PEPE, and Shiba Inu contributed to more than half of Mudrex’s trade volume, signaling continued speculative interest even amid growing institutional adoption.
Trump’s Return and Macro Tailwinds
Industry observers cite the return of Donald Trump to the White House as a confidence catalyst for crypto markets globally. With Trump expected to adopt pro-crypto regulatory positions, both institutional and retail investors appear to be front-running favorable policy shifts.
Tax and Regulatory Uncertainty Still a Drag
Despite the bullish momentum, India’s tax regime—which includes a 30% flat tax on crypto gains and 1% TDS on every trade—remains a significant deterrent, particularly for retail participants.
Experts emphasize that regulatory clarity and tax reform could unlock far greater participation across all investor classes.
Bitcoin Rally Sparks Inflows of $150M+
Between July 10 and July 15, when Bitcoin crossed $116,000, analysts estimate that $150 million to $200 million was invested into the Indian crypto market.
Analysts now forecast Bitcoin to reach between $140,000 and $185,000 by year-end, further fueling allocation interest from India’s growing base of HNIs and institutions.
As India’s wealthiest investors increasingly view crypto as a strategic and necessary allocation, the asset class is quickly graduating from speculation to mainstream adoption. All eyes now turn to regulatory developments—and whether India’s policy approach will catalyze or constrain this emerging shift.
@ Newshounds News™
Source: Coinpedia
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